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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: GST who wrote (144886)	9/3/2004 5:15:02 PM
From: Neocon	Respond to of 281500

Companies borrow because it is the best strategy in a given instance. So do governments. If raising taxes will choke the economy, or encourage tax cheating, or cause a revolt among the electorate, they will not raise taxes. If slashing spending will cause too much turmoil, they will not slash spending. Instead, they will borrow. That is why it is the nearly universal practice of governments to borrow to cover war expenses, so that they do not upend the economy in an emergency. As I said, since the economy grows, revenue grows, and since revenue grows, the only issue is whether debt service is manageable, which is a function of average deficits, and therefore can be adjusted in the medium term without much trouble.